Can you build accountability and responsibility into your trusts and wills?
Traditional estate planning commonly creates what we refer to as an Equal Distribution Trust, which divides all your assets equally among your heirs. When raging a war with an enemy the common strategy is to “divide and conquer.” Why would you want to “divide” your family? See Estate Planning for more details.
We recommend an Equal Opportunity Trust,* due to its ability to encourage a “we” mentality instead of a “me” mentality. An Equal Opportunity Trust sets the stage for generational wealth, meaning that your assets provide new life and resources to your future generations in a way that fosters responsibility and accountability.
Consider establishing a Legacy Bank, a repository where your family can house cash and KASH(Knowledge, Attitudes, Skills, and Habits) that you want to intentionally pass down to your children and grandchildren. Your family’s Legacy Bank can simply include assets from all 3 Dimensions of Authentic Wealth, or you can incorporate more sophisticated approaches, such as the KASH Blueprint and Equal Opportunity Trust, which together can outline the family rules of governance within a trust.
For example, instead of passing down all of your assets to unprepared heirs, your trust could have rules of governance so that future generations could take loans from your money within the trust for college or advanced studies. This money could then be paid back at a small interest rate, and that money could in turn be used to increase opportunities and education for generations to come.
We have helped many highly successful people accumulate their money safely, earning predictable, tax-free rates of return, with historical annual average rates of 5–10%. What that means is, when they retire, every $1 million dollars they have accumulated can generate $70,000 – $100,000 per year of tax-free income (aka tax free retirement), without depleting the principal on their nest egg!
